SAN MARCOS, Calif., Aug. 7, 2012 (GLOBE NEWSWIRE) -- Omnitek Engineering Corporation (OTCBB:OMTK) today reported results for its second quarter ended June 30, 2012, enhanced by a strengthened financial position in preparation for the expected ramp up of diesel truck engine conversions.
Net revenues for the second quarter increased to $380,531 from $374,490 a year earlier. For the same period, the company reported a net loss of $1.0 million, or $0.05 per share, compared with a net loss of $124,808, or $0.01 per share, a year ago.
Results for the 2012 second quarter reflect the impact of a one-time cash expense of $413,306 associated with a private placement completed in April and a non-cash expense for issued options of $502,965. General and administrative expenses for the 2012 second quarter were $1.2 million compared with $243,232 a year ago. Excluding the one-time expenses and the non-cash amounts in the 2012 second quarter, the net loss would have been $99,605, or $0.01 per share, for the three months ended June 30, 2012.
Net revenues for the six-month period were $686,900 compared with $989,746 a year ago. The year-ago period benefited from exceptionally high revenues due to the timing and rescheduling of orders by certain customers. For the same period, the company reported a net loss of $1.2 million, or $0.06 per share, compared with a net loss of $106,697, or $0.01 per share, a year earlier.
The 2012 six-month period was impacted by a one-time cash expense of $413,306 associated with the company's private placement noted above and non-cash expenses, including the value of options and warrants, of $518,415, as well as higher professional fees related to the private placement.
Excluding these one-time cash expenses and non-cash amounts, net loss would have been $247,480, or $0.01 per share, for the six months ended June 30, 2012 and $106,697, or $0.06 per share, for the six months ended June 30, 2011.
Notwithstanding the impact of the aforementioned items, sales for the remainder of the year remain on track to meet and exceed 2011 – supported by sales momentum from domestic fleet operators focused on fuel saving opportunities by utilizing natural gas, a vastly improving regulatory environment and expected EPA certification for one of the most popular medium to heavy duty truck engines within an estimated eight million addressable market.
Gross margin for the quarter ended June 30, 2012 was $231,081 compared with $171,752 a year ago, reflecting product mix. Gross margin for the quarter as a percentage of sales was 61 percent compared with 46 percent compared in the same period a year ago. The company anticipates gross margin will be 38 percent to 42 percent for the balance of the year.
Gross margin for the six-months ended June 30, 2012 was 336,839 compared with $504,378 compared a year earlier, reflecting volume and product mix. Gross margin for the six-month period as a percentage of sales was 46 percent compared with 51 percent in the same period a year ago.
"Global demand for converting high-polluting diesel powered engines to operate on natural gas continues to benefit from increased crude oil prices, environmental considerations and favorable economics. We anticipate strong sales momentum for the balance of 2012, and look forward to meeting domestic demand, with a backlog of conversion business and interest that has been building during the past three quarters in anticipation of EPA certification. We are in the final stages of a process for the company's first two EPA-approved conversion kits and look forward to its successful completion shortly," said Werner Funk, president and chief executive officer of Omnitek Engineering Corporation.
He noted that the company's expansion into international markets continues, with a particular focus on markets in South America, Europe, Mexico and China.
"Contrary to a widely held belief that the rate of natural gas adoption for medium and heavy duty applications in the United States and worldwide is dependent on government subsidies, Omnitek's diesel-to-natural gas engine conversion technology can be successfully utilized without these financial enticements," Funk emphasized.
He noted that the cost for a diesel truck engine conversion can be recouped within a one-to-two year period, and even earlier if performed during a regularly scheduled engine overhaul.
About Omnitek Engineering Corporation
Omnitek Engineering Corp. develops and sells new natural gas engines, as well as proprietary diesel-to-natural gas conversion systems -- providing global customers with innovative alternative energy and emissions control solutions that are sustainable and affordable.
Some of the statements contained in this news release discuss future expectations, contain projections of results of operations or financial condition or state other ``forward-looking'' information. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. Important factors that may cause actual results to differ from projections include, among many others, the ability of the Company to raise sufficient capital to meet operating requirements, completion of R&D and successful commercialization of products/services, patent completion, prosecution and defense against well-capitalized competitors. These are serious risks and there is no assurance that our forward-looking statements will occur or prove to be accurate. Words such as ``anticipates,'' ``expects,'' ``intends,'' ``plans,'' ``believes,'' ``seeks,'' ``estimates,'' and variations of such words and similar expressions are intended to identify such forward-looking statements. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
(Financial Tables Follow)
| OMNITEK ENGINEERING CORPORATION | ||||
| Consolidated Statement of Operations | ||||
| (unaudited) | ||||
| For the Three | For the Three | For the Six | For the Six | |
| Months Ended | Months Ended | Months Ended | Months Ended | |
| June 30, | June 30, | June 30, | June 30, | |
| 2012 | 2011 | 2012 | 2011 | |
| REVENUES | $ 380,531 | $ 374,490 | $ 686,900 | $ 989,746 |
| COST OF GOODS SOLD | 149,449 | 202,738 | 350,061 | 485,368 |
| GROSS MARGIN | 231,082 | 171,752 | 336,839 | 504,378 |
| OPERATING EXPENSES | ||||
| General and administrative | 1,198,267 | 243,232 | 1,435,590 | 509,089 |
| Research and development expense | 48,254 | 32,481 | 77,148 | 59,946 |
| Depreciation and amortization expense | 1,533 | 20,848 | 2,990 | 41,241 |
| Total Operating Expenses | 1,248,054 | 296,561 | 1,515,728 | 610,276 |
| LOSS FROM OPERATIONS | (1,016,972) | (124,809) | (1,178,889) | (105,898) |
| OTHER INCOME (EXPENSE) | ||||
| Interest expense | (82) | -- | (490) | -- |
| Interest income | 1,174 | 1 | 1,174 | 1 |
|
Total Other Income (Expense) |
1,092 | 1 | 684 | 1 |
| LOSS BEFORE INCOME TAXES | (1,015,880) | (114,808) | (1,178,205) | (105,897) |
| INCOME TAX EXPENSE | -- | -- | 800 | 800 |
| NET LOSS | $ (1,015,880) | $ (124,808) | $ (1,179,005) | $ (106,697) |
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | $ (0.05) | $ (0.01) | $ (0.06) | $ (0.01) |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 19,661,571 | 16,471,747 | 18,429,153 | 16,068,031 |
| OMNITEK ENGINEERING CORPORATION | ||
| Consolidated Balance Sheet | ||
| ASSETS | ||
| June 30, | December 31, | |
| 2012 | 2011 | |
| (unaudited) | (audited) | |
| CURRENT ASSETS | ||
| Cash | $ 3,524,094 | $ 31,196 |
| Accounts receivable, net | 86,124 | 13,506 |
| Accounts receivable -related party | 26,847 | 16,715 |
| Inventory | 922,677 | 1,020,117 |
| Prepaid expense | 837 | 2,512 |
| Deposits | 176,001 | 41,943 |
| Total Current Assets | 4,736,580 | 1,125,989 |
| FIXED ASSETS, net | 11,777 | 13,249 |
| OTHER ASSETS | ||
| Long-term Investments, net | 1,222,019 | -- |
| Intellectual property, net | 6,737 | 8,256 |
| Total Current Assets | 1,228,756 | 8,256 |
| TOTAL ASSETS | $ 5,977,113 | $ 1,147,494 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES | ||
| Accounts payable and accrued expenses | $ 65,154 | $ 57,828 |
| Accrued expenses - related parties | 292,517 | 351,580 |
| Accounts payable - related parties | 2,624 | 2,568 |
| Customer deposits | 291,736 | 286,608 |
| Total Current Liabilities | 652,031 | 698,584 |
| Total Liabilities | 652,031 | 698,584 |
| STOCKHOLDERS' EQUITY | ||
| Common stock, 125,000,000 shares authorized no par value | ||
| 19,749,590 and 17,137,812 shares issued and outstanding, respectively | 8,196,061 | 2,659,299 |
| Additional paid-in capital | 4,731,728 | 4,213,313 |
| Accumulated deficit | (7,602,707) | (6,423,702) |
| Total Stockholders' Equity | 5,325,082 | 448,909 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 5,977,113 | $ 1,147,494 |